Number of Americans Obtaining Health Insurance Through an Employer Declines Steadily Since 2000

April 11, 2013

Princeton, N.J.— The percentage of Americans who receive health insurance through employers has fallen significantly over the last decade—from 69.7 percent nationwide in 2000 to just 59.5 percent in 2011, according to a report by the Robert Wood Johnson Foundation (RWJF).

In all, 47 states and the District of Columbia saw a statistically significant decline in nonelderly adults with employer-sponsored insurance (ESI), with 22 states experiencing decreases of 10 percentage points or more.

The report finds that in total, 11.5 million fewer Americans receive their health coverage through their job, or a family member’s job, than did at the start of the century. In 2000, approximately 170.5 million Americans were enrolled in ESI compared with 159 million in 2011.

“Employers continue to shoulder about the same percentage of costs for employees’ health insurance as they did 10 years ago, but everyone’s costs have increased dramatically,” said Risa Lavizzo-Mourey, MD, president and CEO of the Robert Wood Johnson Foundation. “Higher costs naturally translate into fewer employers offering insurance coverage, and fewer employees accepting it, even when it is offered. That is why it is so important that people have options for purchasing affordable health insurance that meets their needs.”

The report was prepared by researchers at the University of Minnesota’s State Health Access Data Assistance Center (SHADAC). Researchers say many factors contributed to the general decline in ESI nationwide and at the state level, including decreases in overall employment and rising premium costs.

Costs of insurance premiums have risen dramatically. Nationally, the average annual ESI premium for employee-only coverage doubled from 2000 to 2011—increasing from $2,490 to $5,081. Family premiums increased 125 percent, from $6,415 to $14,447 in the same time period.

The share of the premium that employees are asked to pay rose slightly, but the dollar amount of employee contributions more than doubled. The average share that employees pay for both types of coverage remained relatively constant—increasing from just 17.5 percent for individual coverage in 2000 to 20.8 percent in 2011. Employee contributions for family coverage increased from 23.8 percent in 2000 to 26.6 percent in 2011. The average dollar amount of employee premium contributions, however, jumped from $435 to $1,056 for single coverage, and from $1,526 to $3,842 for family coverage.

More adults ages 19-25 are covered through employer-sponsored insurance. For young adults ages 19-25, dependent ESI coverage increased by nearly six percentage points—from 30.7 percent in 2000 to 36.5 percent in 2011. The researchers attribute this to the Affordable Care Act provision allowing children under age 26 to remain on their parents’ health insurance policies, which went into effect in 2010.

ESI rates vary significantly across states. Thefive states that saw the largest percentage point drops in ESI from 2000–2011 include Michigan (-15.2 points), South Carolina (-14.9 points), Indiana (-14.8 points), Ohio (-13.7 points) and North Carolina (-13.3 points). ESI enrollment remained statistically stable in just three states during the time of the study—Alaska, Massachusetts and North Dakota. No states saw increases in ESI coverage.

People with lower incomes are most affected. In households with income at or above about $89,400 annually for a family of four in 2011 (400 percent of federal poverty level), ESI dropped just 2.8 percentage points. In contrast, it fell by 10.1 percentage points for those with household incomes below $44,700 for a family of four (200 percent FPL).

“Most Americans under age 65 who have health insurance are still covered through an employer, and that’s not likely to change significantly after the Affordable Care Act is fully implemented next year,” said Lynn Blewett, PhD, director of SHADAC. “Nevertheless, employer-sponsored health insurance has been in steady decline for some time. The state health insurance exchanges, subsidies, and expanded Medicaid program should help many people obtain coverage.”

The SHADAC report uses state-level data from two government surveys: the Annual Social and Economic Supplement (ASEC) of the Current Population Survey (CPS), sponsored by the U. S. Census Bureau; and the Medical Expenditure Panel Survey-Insurance Component (MEPS-IC) sponsored by the Agency for Healthcare Research and Quality. Because of small sample sizes in some states, researchers used two-year averages of each for greater precision of the estimates (data cited here as 2000 is an average of 1999 and 2000 data; data cited as 2011 is an average of 2010 and 2011 data).

About the Robert Wood Johnson Foundation

The Robert Wood Johnson Foundation focuses on the pressing health and health care issues facing our country. As the nation’s largest philanthropy devoted exclusively to health and health care, the Foundation works with a diverse groups of organizations and individuals to identify solutions and achieve comprehensive, measurable, and timely change. For 40 years, the Foundation has brought experience, commitment, and a rigorous, balanced approach to the problems that affect the health and health care of those it serves. When it comes to helping Americans lead healthier lives and get the care they need, the Foundation expects to make a difference in your lifetime. For more information, visit www.rwjf.org. Follow the Foundation on Twitter www.rwjf.org/twitter or Facebook www.rwjf.org/facebook.

About the State Health Access Data Assistance Center (SHADAC)

The State Health Access Data Assistance Center, or SHADAC, is an independent health policy research center located at the University of Minnesota School of Public Health. SHADAC is a resource for helping states collect and use data for health policy, with a particular focus on monitoring rates of health insurance coverage and understanding factors associated with uninsurance. SHADAC is supported by the Robert Wood Johnson Foundation. For more information, visit www.shadac.org.